Medicare Projects Lower Advantage Premiums but Drug Costs Differ by Plan

Federal projections show the average Medicare Advantage plan premium falling from $14.37 in 2026 to $12 in 2027, a 16.5% decrease. But the national average does not tell an individual beneficiary what a specific plan will cost, and prescription coverage is moving differently depending on whether it comes through Medicare Advantage or a stand-alone Part D plan.

The Centers for Medicare & Medicaid Services published the estimates ahead of annual open enrollment, which began October 15 and runs through December 7. The agency says people should compare their own 2027 coverage rather than treating the average premium as a promise that their current plan will be cheaper.

The federal projection is enrollment-weighted: it reflects the distribution of beneficiaries across plans, rather than the unweighted average of every plan price shown in a particular county. CMS estimates that roughly eight in ten existing Medicare Advantage members will have an option to stay with the same or a lower premium, but it does not promise the same provider network, drug formulary or copayment for every enrollee.

A split in prescription premiums

According to CMS, the projected average monthly premium for stand-alone Part D prescription plans rises from $35.09 to $36. Drug coverage included in Medicare Advantage plans moves differently: after applicable rebates, the projected average prescription premium component falls from $11.32 to $7.

Those are distinct markets. Stand-alone Part D coverage is commonly used alongside Original Medicare, while Medicare Advantage plans can bundle medical and drug benefits. Comparing their premium figures without considering how the rest of the plan works can be misleading. Medical-provider networks, prior-authorization rules, deductibles, copayments and the medicines covered can be as important as the monthly charge.

How much choice will remain

CMS expects more than 99% of Medicare beneficiaries to have access to at least one Medicare Advantage plan and approximately 97% to have ten or more options. The agency estimates national Medicare Advantage enrollment could reach 34 million in 2027. Availability varies by county, and an available plan is not necessarily suitable for every person’s doctors or drug needs.

The choice deadline is December 7. Comparing the insurer’s Annual Notice of Change with the 2027 Summary of Benefits can reveal new authorization rules or medication tiers even when the monthly premium looks attractive. Local availability matters because Medicare Advantage plans generally operate with specific service areas and provider networks.

CMS’s announcement also projects that the number of Medicare Advantage plans nationally will be about 5,532, compared with 5,553 in 2026. The agency describes the overall marketplace as broadly stable, but local offerings can change. People who received an annual notice of changes should compare that document with the benefits and drug coverage they actually used this year.

Beneficiaries can use Medicare.gov to review coverage, including a plan’s formulary and summary of benefits, before the December 7 deadline. The federal projections offer a useful starting point, but the final spending decision is made at the level of the individual plan and the care a person expects to use.

References: Medicare Advantage and Medicare Prescription Drug Programs Expected to Remain Stable in 2027